US punishes Bangladesh for deaths

Obama cuts benefits over garment industry horror

WASHINGTON: President Barack Obama cut off long-time US trade benefits for Bangladesh on Thursday in a mostly symbolic response to conditions in the country’s garment industry that have cost more than 1 200 lives in the past year.

The US move does not directly affect Bangladesh’s multibillion-dollar clothing exports, since garments are not eligible for US duty cuts. But it could prompt the EU to similar action, which would have a bigger impact, as Bangladesh’s clothing and textiles exports to the EU are dutyfree.

“I have determined that it is appropriate to suspend Bangladesh… because it is not taking steps to afford internationally recognised worker rights to workers in the country,” Obama said.

The government in Bangladesh said it did not expect the move to have an immediate impact on business, but feared it would hurt US investment in the country over time.

“We are desperately trying to upgrade the situation of our garment factories and we expect assistance, not punitive action,” said HT Imam, government adviser to Prime Minister Sheikh Hasina.

The factories came under scrutiny after the collapse of the Rana Plaza garment factory building in April, which killed 1 132 people, and the Tazreen factory fire in November in which 112 died.

“This was not a decision taken lightly,” US Trade Representative Michael Froman said.

“Our goal, of course, is not only to see Bangladesh restore its eligibility for (the trade) benefits, but to see Bangladeshi workers in safe, appropriate work situations.”

The move also put American companies on notice they must take meaningful steps to improve conditions for Bangladesh’s factory workers, senate foreign relations committee chairman Robert Menendez, a New Jersey Democrat, said.

“No one will want to wear clothing that is ‘Made in Bangladesh’ if it is made on the blood of workers.

“It’s time for American industry to show leadership and work with their European counterparts on a global standard for safety.”

Suspending Bangladesh from the Generalised System of Preferences (GSP) programme will increase US duties on an array of products the country exports to the US, such as tobacco, sporting equipment, porcelain, plastic products and a small amount of textile products.

“I wonder why the US government does not ask US buyers to offer us a better price, instead of deciding to squeeze us further,” said KM Iqbal Hossain, general secretary of the Bangladesh Plastic Goods Manufacturers and Exporters Association.

“This will only make things worse for workers, even in other sectors.”

Hossain said taxes for the plastics industry would rise by 10 percent. Bangladesh exports plastic accessories such as garment clips and hangers, among others.

The GSP programme was created in 1976 to help economic development in the world’s poorest countries and to reduce import costs for US companies.

In 2012, Bangladesh was spared about $2 million (R20m) in US duties on about $35m worth of goods under the GSP programme, said Ed Gresser, a trade analyst with the GlobalWorks Foundation.

An EU decision to suspend trade benefits would have far more impact. EU officials raised the possibility of suspension in early May in the hope of prodding Bangladesh into action.

The EU imported roughly € 9.2 billion ( R119bn) of goods from Bangladesh last year, according to data from the EU’s executive branch, the European Commission.

Clothing and textile products ranging from towels and bedding accounted for almost 93 percent of those goods.

EU and Bangladeshi officials will meet in Geneva next month for talks aimed at improving safety conditions in Bangladesh and preserving the country’s trade benefits.

Bangladesh Garment Manufacturers and Exporters Association president Mohammad Atiqul Islam said it was struggling to improve working conditions in the country and hoped for a better judgment from the EU. – Reuters